Westpac's consumer sentiment index fell by 4 per cent over the past month – a surprise result that has “dashed” hopes that sentiment was about to head higher.
The Westpac Melbourne Institute Index of Consumer Sentiment has fallen 4 per cent from 99.1 in March to 95.1 in April.
Westpac chief economist Bill Evans labelled the result as “disappointing”.
“After holding above 100 in the November–February period, the index has now been below 100 for two consecutive months,” Mr Evans said.
“A print below 100 means that pessimists outnumber optimists. That had consistently been the case in the March 2014 to October 2015 period when the index only exceeded the 100 level twice in 20 months.
“With four consecutive readings above 100, we were hopeful that confidence had moved on to a sustainable higher plain. Today’s result would appear to dash those hopes,” he said.
The index is now 6.4 per cent below its reading six months ago in November.
“The Reserve Bank board next meets on May 3. Despite this disappointing read on [consumer] sentiment, we expect the board will keep rates on hold for another month,” Mr Evans said.
“We retain our call that rates will remain on hold for the remainder of 2016.”